Luding Group will launch bottling of Don Chiku and La Pavesa tequila at partner facilities in the Moscow region

Following whiskey, gin and rum, Russian alcohol companies are trying to establish tequila bottling in the country. In January, two brands in the category will be launched at the facilities of a partner plant in the Moscow region by the distributor Luding Group, which has received permission from the Mexican authorities. Demand for tequila in the Russian Federation remains limited, and locally bottled drinks will not be able to compete with well-known import brands, experts say.

A large importer and distributor of alcohol, Luding Group, received permission from the Mexican government to bottle tequila in Russia, the group told Kommersant. The release of the drink under the Don Chiku and La Pavesa brands in different price segments is planned to begin in January at the Kolomna Wine and Cognac Factory (KVKZ), Luding says. KVKZ received declarations of conformity for alcoholic beverages under such brands in 2023, according to RosAccreditation. The distillate supplier, Luding clarified, is Cooperativa Tequilera La Magdalena, which produces Azteca and El Caudillo tequila. The group did not disclose investments in launching brands and planned volumes of bottling. Cooperativa Tequilera La Magdalena and the Mexican Tequila Regulatory Council did not respond to Kommersant.

According to data from market participants available to Kommersant, in January-November 2023, Luding increased tequila imports by more than 50% year-on-year, to 236 thousand liters. In total, 3.1 million liters of tequila were imported into Russia during this period, compared to 2.04 million liters a year earlier. In the total volume of imports of strong alcohol, tequila accounts for about 3.7%. For comparison: in January-November 2023, 33.9 million liters of whiskey, 19.5 million liters of cognac and brandy, 6.19 million liters of rum, etc. were imported into the Russian Federation, excluding supplies from the EAEU.

Luding Marketing Director Irina Osadchaya notes that the company sees a global trend towards the consumption of tequila in pure form and in cocktails. Group executive director Ernest Khachaturian added that the company has already launched its brands in various categories, and tequila is a logical step in expanding its presence in the market.

In October 2023, the owner of the Kaluga distillery Kristall, Pavel Pobedkin, announced that he had received permission to bottle tequila at a presentation for the IPO. As RBC reported, the plant plans to start bottling the drink in the second quarter of 2024. Kristall declined to comment.

Tula distillery 1911 and Ladoga (Tsarskaya vodka, Barrister gin, Fowler’s whiskey) had previously considered creating their own tequila brands, the companies told Kommersant. Marketing Director of the Tula Distillery 1911 Oksana Gitelman notes that the tequila category in Russia is very small, although the drink is needed in the assortment of companies with a developed HoReCa channel. Ladoga President Veniamin Grabar says that for now the group’s plant is busy with key products, the demand for which is higher than production capacity, but in the future Ladoga will return to considering the possibility of bottling tequila. The Rust Group of Companies (Russian Standard, Green Mark, etc.) stated that they are not interested in launching a tequila brand due to the limitations of the category.

Alexander Stavtsev, head of the WineRetail information center, notes that large players are probably looking for new promising niches in the strong alcohol market, hoping to take part of the share of little-known import brands. But, the expert adds, the demand for tequila in Russia still remains limited, and local brands will have to compete, including with the chains’ own brands. According to the secretary of the Alcopro guild, Andrei Moskovsky, the main thing is that Russian factories pay attention not only to the cost of drinks, but also to quality, since there are already many inexpensive “vodka substitutes” on the shelves.

CIFRRA director Vadim Drobiz is confident that, like whiskey bottled in Russia, the same tequila will not be able to compete with imported brands that have a different group of consumers. According to him, local brands of whiskey and tequila may attract some vodka consumers.

Veniamin Grabar adds that geopolitical and logistical difficulties may arise with the import of distillates. According to him, it was possible to organize the transportation of containers with finished products, but not all carriers of tanks with distillates, seeing Russia as the final delivery point, are ready to accompany the delivery, and reloading such a container is a labor-intensive process.

Anatoly Kostyrev